Some of the hedge funds that made fortunes in the housing-market crash are now betting on the recovery of Fannie Mae and Freddie Mac, the government-controlled mortgage giants, the Wall Street Journal reported today. Paulson & Co. and Perry Capital LLC are among a handful of hedge-fund firms that have bought preferred shares in Fannie and Freddie, which collapsed in value in 2008 after the companies were taken over by the federal government. These firms are hoping Fannie and Freddie's recent return to profitability on the back of a recovering housing market will lead eventually to the companies being able to make payments to preferred shareholders.
